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Depositors get access to their FDIC insured deposits but will be taking haircuts for deposit amounts above that.
cisTits says
Depositors get access to their FDIC insured deposits but will be taking haircuts for deposit amounts above that.
I see you noticed that statement did not age well.
Let us focus on Silicon Valley Bank. It has been in business 40 years. Its capitalization was roughly $209 billion. Joseph Gentile was the chief administrative officer of the bank. In a prior life, he was chief financial officer of Lehman Brothers. He left one year before this giant bank collapsed.
Janet Yellen devised a de facto bailout program that got the blessing of President Biden. When depositors show up at the three banks cited above, it will be, seemingly, "business as usual." Everybody will get paid.
What went wrong with these banks? These banks went out and bought long-term bonds at low interest rates. When interest rates rose, these bonds dropped in value. The banks became technically insolvent. Let us focus on Silicon Valley Bank. It has been in business 40 years. Its capitalization was roughly $209 billion. Joseph Gentile was the chief administrative officer of the bank. In a prior life, he was chief financial officer of Lehman Brothers. He left one year before this giant bank collapsed. He knew quite well what happens when a bank gets reckless with its investments in pursuit of higher profits. He repeated the same mistake with his current employer. Here is a great report on Silicon Valley Bank:
https://www.youtube.com/watch?v=eqAwwEs6Jq0
Everyone get ready for real estate prices to drop. There will be some big bargains out there.